Editor's note: Morning Scan will not publish on Friday, April 14 in observance of Good Friday. We'll be back on Monday, April 17.

Breaking News

Earnings: JPMorgan Chase beats earnings and revenue expectations as profit jumps 17%; Wells Fargo's earnings were unchanged as revenue fell. Citigroup reported a 17% increase in earnings as revenue rose 3%.

Receiving Wide Coverage ...

Reducing its stake: Berkshire Hathaway sold 7.1 million shares in Wells Fargo and plans to sell another 1.9 million "in the near future" in order to keep its ownership stake below 10%. The company made it clear "these sales are not being made because of investment or valuation considerations," i.e., not in response to the bank's fake accounts scandal. Rather, Berkshire applied to the Federal Reserve last year for approval to own more than 10% of the bank but found that doing so "would materially restrict our commercial activity with Wells Fargo." Wall Street Journal, Financial Times

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway.
Warren Buffett, chairman and chief executive officer of Berkshire Hathaway. Bloomberg News

Indeed, Berkshire Hathaway is likely to vote to support the bank's directors at Wells' annual meeting later this month.

Failing grades: More than nine out of 10 equity mutual funds failed to outperform their benchmarks, even over as long as 15 years. The latest S&P Indices Versus Active funds scorecard, also known as Spiva, found that 95.4% of U.S. mid-cap funds, 93.2% of small-cap funds and 92.2% of large-cap funds trailed their respective benchmarks over the 15 years ending December 2016. "We often hear from active managers, 'You need to measure us over a longer-term cycle,'" said Aye Soe, managing director of research and design at S&P Dow Jones Indices. "Even over a full market cycle, which includes peaks and troughs, we still see the majority of active managers performing unfavorably against their benchmarks."

Bond funds don't measure up too well, either. A majority of bond funds failed to beat their market averages over long periods, too, according to the Spiva report. The report "hammers home the failure of most equity managers to beat the stock market over any timeframe, but it is the emerging long-term data on bond funds that will be most closely scrutinized," the Financial Times comments. S&P found investment-grade bond funds were more likely to underperform their benchmarks over 10 years, while less than 4% of more speculative funds, like high-yield bonds, outperformed the market.

Wall Street Journal

Going public: Cadence Bancorporation expects to become the first major American bank to go public since last September. The Houston-based bank is looking to raise about $150 million next Wednesday through the sale of 7.5 million shares, which would value the bank at $1.65 billion. "How Cadence fares could serve as a proxy for what investors think of several key topics in the banking industry, including how firms will deal with volatile energy loans and how small banks will handle higher regulatory burdens as they expand," the paper said.

Extreme: Bank of America has asked a federal bankruptcy judge in California to lower the $45 million penalty he imposed on the bank for its treatment of a California couple that tried to avoid foreclosure. The bank asked Judge Christopher Klein, who chastised the bank for being "brazen" and "heartless" and called its behavior in the affair Kafkaesque, to amend the penalty, calling it "excessive" and "unprecedented in its magnitude." BofA said the fine violates 2008 guidance from the Supreme Court intended to prevent outsized awards. The judge's order called for the couple to donate most of the award to five law schools and two legal-aid nonprofits.

Defi-Ant: Ant Financial Services, Alibaba Group's payments unit, said it won't consider raising its $880 million takeover bid for MoneyGram International unless it can be proven that a competing bid is superior. Last month Euronet offered to buy MoneyGram for about $1 billion, and since then has been alleging that Ant's bid faces tough U.S. regulatory approval because of its Chinese connection.

Financial Times

Love me not: Fintech startups like to think that customers prefer them over traditional banks. But not according to the Federal Reserve Bank of New York's 2016 small business credit survey, which found that fintechs, and more specifically online marketplace lenders, aren't as beloved as they like to believe. In fact, the FT writes, "small businesses in the U.S. are more satisfied with big banks than they are with cool, hip, new online lenders. Despite all the marketing and hype, the fintech players are liked less than the people who set fire to the economy."

Quotable ...

"The court's punitive award represents a stunning departure from past practice." – Bank of America

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